Agenda and draft minutes

The Chair thanked Councillors Allen and McKiernan for their work on behalf of the Audit Committee.

The Chair welcomed Councillor Monk to her first meeting of the Audit Committee.

To receive declarations of interest from Members in respect of items listed on the agenda.

There were no Declarations of Interest made at the meeting.

To receive questions relating to items of business on the agenda from members of the public or press who are present at the meeting.

There were no members of the public in attendance at the meeting nor had any questions been received in advance of the meeting.

The member of the press present at the meeting did not have any questions.

To determine whether the following items should be considered under the categories suggested in accordance with Part 1 of Schedule 12A (as amended 2006) of the Local Government Act 1972.

Under Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for:-

Agenda Item 12 (Internal Audit Progress Report – Appendix G) on the grounds that it involves  the likely disclosure of exempt information as defined in Paragraph 7 of Part I of Schedule 12A to the Local Government Act 1972 (information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime) and

Agenda Item 13 (Adult Social Care, Housing and Public Health Directorate Risk Register) on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Part I of Schedule 12A to the Local Government Act 1972 (information relating to the financial or business affairs of any particular person (including the authority holding that information)).

Resolved:-  That, under Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for Minute Nos. 13 (Internal Audit Progress Report – Appendix G as defined in Paragraph 7 of Part 1 of Schedule 12A to the Local Government Act 1972 (information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime) and

Minute No. 14 (Risk Management Directorate Presentation – Adult Care, Housing and Public Health) as defined in Paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 (information relating to the financial or business affairs of any particular person (including the authority holding that information))

To consider and approve the minutes of the previous meeting held on (insert date) as a true and correct record of the proceedings and to be signed by the Chair.

Consideration was given to the minutes of the previous meeting of the Audit Committee held on 17^th March, 2026.

Resolved:-  That the minutes of the previous meeting of the Audit Committee be approved as a correct record of proceedings.

Representatives of Grant Thornton (External Auditor) to present

Liz Luddington, Engagement Lead and Key Audit Partner, and Greg Charnley, Audit Senior Manager, Grant Thornton, presented the 2025-26 External Audit Plan.  As a result of the good arrangements in place both the production of draft financial statements and engagement with Grant Thornton, Rotherham had not been affected by any of the backstop provision for local authority audits. 

In order to meet future statutory deadlines for 2025-26, Grant Thornton would be working towards an internal deadline of 30^th November, 2026.  A detailed project plan for the audit fieldwork period was scheduled from the beginning of July through to early November.

It was the aim for the audit work to be operationally completed by the end of October with the key outputs and reports being drafted and agreed with management in the first half of November prior to the Audit Findings (ISA260) report on the accounts and the Auditor’s Annual Report on the Council’s value for money arrangements being submitted to the 24^th November meeting of the Audit Committee.

The report covered the key issues both for the national and local contexts.  Areas of significant risk were the same as in previous years, centring around management over-ride of controls, closing valuation of land and buildings (including Council dwellings) and valuation of local government pension scheme defined benefit pension fund net balance.  Materiality was calculated on a similar principle as previous years but if items went above those thresholds they would be considered separately within the audit. 

The planning work for the 2025-26 audit had commenced in March 2026 and continued into April.  The final accounts work would begin in July through to November.

Audit fees were set by PSAA as part of their national procurement exercise.  Grant Thornton had been awarded the contract with effect from 2018-19 and was successful in the re-tendering exercise conducted in 2023.  The scale fee set out in the PSAA contract for the 2025-26 audit was £429,398.

Resolved:-  That the update and the audit plan be noted.

Rob Mahon, Service Director, Financial Services, to report

Consideration was given to a report presented by Natalia Govorukhina, Head of Corporate Finance, which introduced the draft Statement of Accounts, which had been published on the Council’s website on 10^th June 2026.  This was slightly later than the original date of 31^st May, 2026 allowing for effective quality and assurance checks to be performed, however, it complied with the 30^th June statutory deadline for the publication of draft accounts.  The period for local electors to exercise their rights for the public inspection phase had commenced on 11^th June, 2026 and would end on 22nd July, 2026, then follow on to the external audit phase of the process. 

It was proposed that the final accounts would be produced by the end of September 2026.  However, Grant Thornton had indicated that, due to capacity constraints, it was likely to be late November for the completion of the audit of the accounts.

The Statement of Accounts included 4 appendices, the first was the narrative report, which was a more concise and easier to follow overview of the Council’s financial standing, which covered the key areas of the accounts. Appendix 2 was the highlights report setting out key matters reported in the 2025-26 accounts; Appendix 3 was the unaudited statement of accounts 2025-26 and Appendix 4 showed the Council’s response to enquiries from Grant Thornton with regard to issues that informed their audit risk assessment. The areas covered included fraud, laws and regulations and accounting estimates. 

The accounts have been produced in accordance with the CIPFA Code of Practice.

In response to a question, it was clarified that when new build assets were applied to the asset register they were included at cost i.e. what was paid for the actual building.  After a year they were revalued and often significantly less than the cost of building them.  The significant reductions in expenditure in 2025-26 reported within the Comprehensive Income and Expenditure Statement were primary due to revaluation losses in 2024-25 resulting from the implementation of IFRS16 and the practical completion of Forge Island.  The operational leases would be moved onto the balance sheet.  The reduction in other operating expenditure reflected a loss on disposal in 2024-25 primarily caused by the derecognition of Council assets when schools became academies.

It was noted that the Audit Committee had had a training session on the Statement of Accounts in advance of the meeting.

Resolved: That the draft unaudited 2025-26 Statement of Accounts be noted.

Judith Badger, Executive Director, Corporate Services, to present

Consideration was given to the draft Annual Governance Statement (AGS) for the 2025-26 financial year as presented by Katie Stead, Policy, Improvement and Risk Manager.  This was published alongside the Council’s Statement of Accounts on 10^th June, 2026.  The paper briefly set out the process that was followed to construct this AGS and had been updated in line with the new guidance from CIPFA and had 2 new sections - Executive Summary and Forward Look.

A process to gather assurances and evidence to support the AGS was led by the Corporate Governance Group which included the Executive Director of Corporate Services, the Service Director of Legal Services, the Head of Internal Audit and the Policy, Improvement and Risk Manager.  The draft AGS was then reviewed by the Monitoring Officer, Executive Director of Corporate Services, the Chief Executive and the Leader.

Each Executive Director had overseen a self-assessment of governance within their Directorates comprising of a self-assessment form based on the Principles and Sub-Principles in the Code of Corporate Governance by each Service Director as well as a review and update of the detailed issues raised in the 2024-25 AGS.  Each Executive Director and Service Director was also required to submit a Statement of Assurance based on the information arising from their review of current and previous governance issues.  These were then reviewed by the Corporate Governance Group also considering which issues were of sufficient significance to require reporting in the AGS. 

It sets out the assurances in place to evidence conformance with the Council’s Code of Corporate Governance which was approved by the Committee in September 2025 and included the results of an internal self-assessment led by the Corporate  Governance Group and review of previous issues identified.

The statement concluded that governance arrangements were effective overall during 2025-26 and highlighted progress made throughout the financial year as well as highlighting areas for further improvements. 

The final statement would be submitted to the November meeting together with the final statement of accounts and updated to include any emerging governance issues.

It was suggested that there may be some benefit to further separate those services that were assessed as partially conforming with only a small number of sub-categories within the code.

Resolved: That the draft 2025-26 Annual Governance Statement be noted.

Rob Mahon, Service Director, Financial Services, to report

Consideration was given to the Annual Treasury Management Report, presented by Natalia Govorukhina, Head of Corporate Finance, which was the final treasury report for 2025-26. Its purpose was to review the treasury activity for 2025-26 against the Strategy agreed at the start of the year. The report also covers the actual Prudential Indicators for 2025-26 in accordance with the requirements of the Prudential Code.

The Council received an Annual Treasury Strategy Report in advance of the 2025-26 financial year at its meeting on 5th March, 2025, and the Committee received a mid-year report at its meeting on 25th November, 2025, representing a mid-year review of treasury activity during 2025-26. In addition, quarterly updates were received by Audit Committee on 29^th July, 2025 and 17^th March, 2026.

This report meets the requirements of both the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities.

The Council was required to comply with both Codes through regulations issued under the Local Government Act 2003.

Appendix 1 of the report submitted gave a summary of the Prudential Indicators for the Council.

The underlying economic and financial environment remained difficult for the Council to predict.  Inflation had fallen back from historic highs in recent years and the Bank of England continued to cut interest rates.  However, market sentiment had been heavily influenced by the Middle East conflict.  Commentators anticipated a growing risk of inflation meaning interest rates would likely not be cut for some time and may increase to counteract inflationary pressures arising from steepening energy costs.  The cost of long term borrowing form PWLB had also increased during the year, in part reflecting this sentiment.  With regard to investments, the main challenge was concerns over investment counterparty risk.  This background encouraged the Council to continue maintaining investments short term and with low risk counterparties.

During 2025-26 the Council had continued to pursue its short-term borrowing strategy in line with advice from its Treasury advisers.  Borrowing was taken only as needed and would be refinanced in the next few years.  This had resulted in a significant increase in the net under borrowed position.  The Council would continue to monitor the interest position with a view to taking out further long term borrowing if there were dips in the long term borrowing rates but currently was utilising short-term borrowing to cover immediate borrowing need in anticipation of lower rates in the future.  This process was separate from the Council’s financial monitoring which tracked planned and actual expenditure against planned budgets.

The Council had reduced its investment balances in recent years as funds had been used to meet loan maturities rather than refinancing at historically high interest rates.  In 2025-26 the Council had borrowed an additional £142M from local authorities and PWLB.  In addition the Council had repaid £110.2M of principal on a mix of local authority and PWLB loans. 

It was noted that the report would be considered by Cabinet at its meeting on 6  ...  view the full minutes text for item 10.

Simon Moss, Service Director, Regeneration and Environment, to report

Simon Moss, Service Director, Regeneration and Environment, presented a report setting out the actions taken and implementation of the recommendations made with regard to the Partial Assurance Internal Audit report on highway structures.

Under the Design Manual for Roads and Bridges, the Highway Authority was to carry out General Inspections (GI) every 2 years and Principal Inspections (PI) every 6 years.  PIs could be risk assessed to reduce the frequency up to 12 years.

In 2024 it was acknowledged that there was a significant backlog of inspections and a range of actions were determined to manage and reduce the risk profile.  One of the actions was to invite Internal Audit to undertake a further detailed review.

Internal Audit had issued a Partial Assurance opinion on the report with 9 recommendations:-

Recommendation One – Risk Reporting

This action was completed prior to the final audit report being circulated in December, 2025.

Recommendation Two – Risk Appetite

This action was completed prior to the final audit report being circulated in December, 2025.

Recommendation Three – Mine Workings

As the action was for future works, there was no deadline.  However, as part of pre-construction information, a section for mine working had been highlighted in the PCI packs to be completed in the future.

Recommendation Four – Weakness in inspection data

This action was completed prior to the final audit report being circulated in December, 2025.

Recommendation Five – Safety Inspections

This action had started prior to the final report being circulated in December, 2025, however it was an ongoing activity.

Recommendation Six – Ownership of Highways Structure Assets

This was an ongoing action and agreed that it would be managed on a case-by-case basis where there was ambiguity in records of the asset ownership.

Recommendation Seven – Highways Asset Management Plan (HAMP) disclosure

This action was completed prior to the final audit report being circulated in December, 2025 as the HAMP update was in November, 2025.

Recommendation Eight – Continuing Professional Development

This was an ongoing action.  It was agreed that at the time of appointment of staff (permanent or temporary) that suitable checks would be carried out as part of the onboarding process.  For contract staff, suitable checks would be carried out annually at a point where purchase orders needed to be extended/renewed.

Recommendation Nine – Follow-up Inspections

This was ongoing activity.

In 2025, the Council had 365 structures listed on its highway asset register.  Of those, only 9 structures had a GIs within the 2 year validation period and 43 PIs within the 6 year validation period.  As of June, 2026, all the structures had an up-to-date GI and carried out within the 2 year timeframe.

The approach to PIs was to commission external contractors for the inspections which could be carried out inhouse due to third parties e.g. Network Rail Canal and River Trust etc.  In the last year 40 PIs had been commissioned and a further 50 carried out inhouse.  81 structures now had a valid PI within the  ...  view the full minutes text for item 11.

Louise Ivens, Head of Internal Audit, to report

Consideration was given to a report presented by Louise Ivens, Head of Internal Audit, which provided information on the role of Internal Audit; the work completed during 2025-26 and highlighted the key issues that had arisen therefrom.  It provided the overall opinion of the Head of Internal Audit on the adequacy of the Council’s control environment, risk management and governance.  It also provided information regarding the performance of the Internal Audit function during 2025-26.

Based upon the Internal Audit work undertaken and, taking into account other internal and external assurance processes, it had been possible to complete an assessment of the Council’s overall control environment.  In the opinion of the Head of Internal Audit, the Council had overall an adequate and effective framework of governance, risk management and control. 

There had been a reduction in the number of audit reports with Partial/No Assurance opinions from the previous year.  Management continued to proactively seek audit assurance where concerns existed.  Whilst the Partial Assurance opinions had identified weaknesses in the control environment or compliance with controls, the weaknesses were not material enough to have a significant impact on the overall opinion on the adequacy of the Council’s governance, risk management and control arrangements at the year end.  The work undertaken during the year had clearly focused on the key risk areas of the Council and targeted to specific areas of concern.

The report included:-

-        Legislative requirements and Professional Standards

-        The Head of Internal Audit’s annual opinion on the control framework, risk management and governance

-        Resources and audit coverage during the year

-        Summary of audit work undertaken during 2025-26, including both planned and responsive/investigatory work

-        Summary of other evidence taken into account for control environment opinion

-        Summary of audit opinions and recommendations made

-        Internal Audit performance indicators

Audits were carried out in all areas of the Council during the year with the overall level of control found in audits to be good. 88% of audits resulted in a Substantial or Reasonable Assurance opinion with 6 Partial Assurances. 

During 2025-26, 197 recommendations (210 in 2024-25) were made to improve the internal control, risk management and governance arrangements across the Council. Of these, 17 (32 in 2024-25) were in the highest category (red).

There had been one staffing change during the year due to an experienced member of team having retired.  The post had proven difficult to recruit to but the new postholder would be taking up the position shortly together with a trainee auditor.  During 2025-26 this had had a minor impact on the number of days performed, however, it was the opinion of the Head of Internal Audit that resource levels throughout the year provided sufficient capacity to provide an adequate level of assurance to the Audit Committee and Executive Director of Corporate Services.  Sufficient work was completed during 2025-26 to enable the Head of Internal Audit to provide her overall opinion.

The Global Internal Audit Standards (UK Public Sector) required a quality assurance framework to  ...  view the full minutes text for item 12.

Louise Ivens, Head of Internal Audit, to report

Consideration was given to a report presented by Louise Ivens, Head of Internal Audit, which provided a summary of Internal Audit work completed during 1^st February to 30th April, 2026, and the key issues that had arisen.

The plan attached as part of the report showed the position up to the end of April 2026, the progress of the 2025-26 audit plan, the reports finalised between February and April 2026 and performance indicators for the Team.  Since the last report there had been 6 audit actions that had been deferred which had reduced to 4 by May. 

Internal Audit provided an opinion on the control environment for all systems or services which were subject to audit review. The report detailed the audit opinions and a summary of all audit work concluded in the last quarter. 11 audits with 15 reports, had been finalised since the last Audit Committee, 2 of which had received Substantial Assurance, 12 received Reasonable Assurance opinion and 1 Partial Assurance. 

A review of the current performance indicators was detailed in Appendix D, post-audit questionnaires and results included at Appendix E and the Quality Assurance and Improvement Plan at Appendix F.  Appendix G set out details of the Internal Audit investigative work completed.

It was noted that the Liquid Logic audit had been undertaken by Salford IT on the Authority’s behalf and had raised an issue with the ‘Super User’ profiles.  The Service had taken immediate action in reducing access across the CYPS and Adults Directorates.  During the time of Salford reporting the issue, Internal Audit had undertaken deep dive testing to ascertain there had been no inappropriate activity.  This had been reported to the November meeting of the Committee (Minute No. 53 of 25^th November, 2025 refers).

Resolved:-  (1)  That the Internal Audit work undertaken since the last Audit Committee, 1^st February to 30th April, 2026, and the key issues that have arisen from it be noted.

(2)  That the performance objectives of Internal Audit and the actions being taken by audit management in respect of meeting the performance objectives be noted.

(Appendix G was considered in the absence of the press and public in accordance with Paragraph 7 of the Act (information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime).

Ian Spicer, Executive Director, Adult Care, Housing and Public Health, to report

Consideration was given to a report, presented by Scott Matthewman, Service Director Strategic Commissioning, providing details of the Risk Register and risk management activity within the Adult Care, Housing and Public Health Directorate.

A detailed breakdown was given of the Directorate’s approach to risk management and the efforts to ensure transparency and the understanding of risk management by all staff. 

In response to a query further information and assurance was provided on the risks rated red within the Directorate, which included risks, ACHPH-R49, ACHPH-R51 and 52,

Resolved: That the progress and current position in relation to risk management activity in the Adult Care, Housing and Public Health Directorate, as detailed in the report now submitted, be noted.

(The report was considered in the absence of the press and public in accordance with Paragraph 3 of the Act (information relating to the financial or business affairs of any particular person (including the authority holding that information).

Louise Ivens, Head of Internal Audit, to report

Consideration was given to the proposed forward work plan for the Audit Committee for July 2026 to June 2027. The plan showed how the agenda items related to the objectives of the Committee. It was presented for review and amendment as necessary.

Resolved:-  That the Audit Committee forward work plan, as now submitted, be approved.

To consider the referral of matters for consideration by the Overview and Scrutiny Management Board.

There were no items for referral.

To consider any item which the Chair is of the opinion should be considered as a matter of urgency.

There was no urgent business for consideration.